Today's lesson, Racism. If you see something written here that you’ve said or done, use it as an opportunity. Take it as a wake up call and make the decision to grow, change and be conscious of your own privilege. Remember, I am not a speaker for the entirety of a people. Use this blog as a reference tool, not as the one and only view on the topic.
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What if you’ve had credit cards and loans but they have all been sent to collections and you no longer have any revolving credit payments?
This is a place where many of us find ourselves after we’ve overextended ourselves. With this, you have to take a completely different approach.
This is not specifically about raising your credit score or rebuilding your credit. This is about cleaning up your credit. Here’s what you do:
Don’t look at your score. Save that for later. Plus, you know it’s not going to be good, don’t spend the money yet.
Get your free credit reports from all three credit bureaus.
Make a list of who you owe, how much you owe and the date each item will be removed from your credit report.
Put each item amount/company owed in order of the date it will be removed from your report. With the items that will be removed last, at the top of the list and items being removed first, at the bottom.
You are paying off each item according to date, NOT according to how much is owed.
Newer items (Items that will be on your report the longest) are to be paid first.
Being completely honest about what you can afford right now, decide how much you could pay monthly on the first item.
If items one to three on the list are small amounts, try to pay something on each. Look at it through a six month lense. For example, if you owe $60 or less on items 1, 2 and 3 on the list, commit (if you can HONESTLY afford it) to sending $10 per month to each of the three items. They will all be paid in full within a six month period and you would have knocked out three items at the same time!
If item one is a bigger amount ($500 or more) focus ONLY on the first item. Pay it in full and then move to the next item(s) on the list.
DO NOT SKIP AROUND!
If you only owe $45 on item two but owe $3,000 on item one, don’t pay off item two THEN start on item one. The only exception here is if you can pay off the amount in ONE payment. Anything you need to make monthly payments to in order to pay off (No matter how much is owed) should be paid in listed order.
This will take time. Be patient. It’s worth it.
Once you have cleaned your report, then, get your score and start to work on rebuilding your credit.